Shell Farms in to the Transkei-Algoa Block, Offshore South Africa
Royal Dutch Shell Plc has entered into an agreement with privately-held Impact Oil & Gas Ltd. to farm in to the Transkei-Algoa block (ER 12/3/252) located off the coast of South Africa. The terms of the transaction have not been disclosed.
Under the terms of the agreement, BG International Ltd., a wholly-owned subsidiary of Shell, will acquire an initial 50% operated interest in the Transkei-Algoa block from a subsidiary of Impact. In addition, Shell has been granted an option to acquire a further 5% interest in the block should the Shell-Impact Joint Venture (JV) elect to move into the third renewal period, expected in 2024. Impact Oil & Gas will retain a 50% interest in the block.
The Transkei-Algoa block covers an area of approximately 45,838 sq. km, and is located across the South Outeniqua and Natal Trough basins in a water depth of approximately 3,000 meters. Impact has identified highly material prospectivity, associated with large submarine fan bodies, near the Transkei block. The Shell-Impact JV plans to explore the Transkei block with focused 3D seismic data, followed by exploratory drilling. The acquisition of 6,000 sq. km of 3D seismic is expected to be completed in Q1-2022.
On October 20th, Impact had acquired an additional 40% the Transkei-Algoa block from Exxon Mobil Corp., increasing its operated interest to 100%.
“We are delighted to have secured a farm-out partner of Shell’s calibre, highlighting the significant value potential of our exceptional South African exploration portfolio. Shell joins the Transkei & Algoa licence at a very exciting time for exploration drilling in South Africa. They bring substantial exploration expertise, with particular understanding of the potential of offshore South Africa, and an agreed strategy to accelerate the work programme to build upon the considerable work already undertaken by Impact and the previous JV partnership,” said Siraj Ahmed, Impact’s CEO.
Based in Woking, England, Impact Oil & Gas currently holds a portfolio of offshore exploration assets in Namibia, South Africa, and AGC (Senegal / Guinea Bissau). TSX-listed Africa Oil Corp., part of the Lundin Group of Companies, holds a 31.1% stake in the company.
The transaction is subject to customary closing conditions, including the receipt of approval from the South African government.